Life events like marriages and holidays require planning to ensure you get what you expect from them: your retirement is no exception.
Retirement is a journey – start out by plotting what you want your destination to be so you can plan how best to get there. Knowing exactly what you want in the future can be tricky. However, there are some simple steps you can take to help you plan and save for your later life and to make sure that the retirement you get is the retirement you want.
- Get to know your State Pension
The State Pension is a regular payment you can claim from the government when you reach State Pension age. The State Pension age is also regularly reviewed and can change, so it’s important to check it.
The amount you receive is based on your National Insurance contributions which you build up throughout your working life. As a result, yours may be higher or lower than the average which is £8,767.20 a year in 2019/20. You can check your State Pension online to find out what you could get, and when you can get it. You can also find out more about National Insurance contributions.
- Get Saving
When leading busy lives, we all tend to prioritise our day-to-day needs, but it’s really important to think about the future too. Even if you can only save a small amount to start with, you’d be surprised how much your pension pot can grow so get into the habit of saving regularly. You can also get a personal retirement checklist to fully explore your saving options.
Remember, the State Pension is a good foundation for when you retire, but it might not give you the income you want on its own, so think carefully about contributing to a private pension or saving in some other way. And if you need to stop saving for now, try to start saving again as soon as you can.
People are also living longer and therefore may have to save more to get the retirement they want. For example, a girl born in 1951 was expected to live to 82 and a boy to 77, but by 2018 this had increased to 92 and 90 respectively. Increasing life expectancy means people may have to save more to get the retirement they want.
- Keep Saving & Saving More
The Pensions Advisory Service have lots of information about your options. They can help you think about what you have saved already, how much more you want to save, and the different ways you can achieve it. The Department for Work and Pensions website also has lots of tips and tools about how you can plan more for the retirement you want.
You might already have one or more pension pots, perhaps a private pension or a workplace pension from a previous job. You may get annual statements to remind you how much you have saved. If you’ve lost track of a pension pot, then check your paperwork and try the Pensions Tracing Service to get up to date contact details.
This pension calculator from the Money Advice Service can help you understand how much you could get from your total pension pot.
- Working Differently
Retirement does not have to be a finish line. You do not have to stop working just because you have reached a specific age.
For many people, working differently can be a good bridge into retirement. Staying in work means you can keep earning and keep saving too. Slowing down, working flexibly or even doing a different job could give you more options and be a better fit. In fact, being self-employed could give you even more options to work differently.
Take a mid-life MOT to you help take stock of your work, wealth and wellbeing and help you plan for the retirement you want, get guidance around your skills, work and health. The Pensions Advisory Service also offer a free Midlife Review for Self Employed People.
- Check your State Pension
- Save regularly, check how much to save and when possible increase your saving.
- Get a personal retirement checklist to fully explore your saving options.
- Get a mid-life MOT to explore your options for working differently.
Plan ahead to make sure that the retirement you get is the retirement you want.
A special guest blog by The Department of Work and Pensions (DWP)